Google Scraps Plan to Build Hong Kong Data Center

Internet giant Google Inc. has scrapped a plan to build its own data center in Hong Kong and will instead expand its facilities in Taiwan and Singapore.

This undated file photo made available by Google shows the campus-network room at a data center in Council Bluffs, Iowa.

Associated Press

“While we see tremendous opportunity and potential in Hong Kong…we will not be moving ahead with this project,” Taj Meadows, Asia-Pacific policy communications manager, told The Wall Street Journal on Tuesday, citing cost and the difficulty in acquiring spacious land in Hong Kong to build a facility.

Data centers house computer, telecommunications and storage systems, and typically include backup power supplies and security devices.

Mr. Meadows declined to comment when asked whether the decision might be because of Hong Kong’s proximity to China, where Google has faced challenges in expanding its business following its run-ins with the Chinese government over censorship in 2010. Tensions between the U.S. and China have heightened in recent months following revelations by National Security Agency contractor Edward Snowden that the U.S. agency collects sensitive data.

Last month, Google Executive Chairman Eric Schmidtexpressed concerns about reports that the U.S. government allegedly spied on its data centers, describing such an act as “outrageous” and potentially illegal if proven.

Google operates 12 data centers globally, with seven based in the Americas region. The company has announced an investment of $300 million for the data center in Taiwan and $120 million for the facility in Singapore. Both centers are expected to be operational later this year.

Google first announced in 2011 that it would build its own data centers in Asia and was looking to acquire land in Singapore, Taiwan and Hong Kong. The move to set up its own centers in Asia comes as Google, like many other Internet companies, is seeing robust growth in Internet traffic and a rise in new users across many parts of Asia. More consumers are using smartphones and tablet computers to access online videos and other content requiring higher data bandwidth. Companies typically decide to build their own data centers for better security.

As a result of the move to abandon the Hong Kong data center, Google will have two data centers in Asia – one in Taiwan’s Changhua county and the other in Singapore.

“To keep up with the rapid growth in users and usage across the region, we need to focus on locations where we can build for economies of scale,” Mr. Meadows said, noting that the company isn’t scaling back its Hong Kong operations despite abandoning plans to build a data center.